Monthly Archives: June 2010

I recently had the opportunity to ask Robert Martichenko and Kevin von Grabe some questions regarding their new book Building a Lean Fulfillment Stream. I have not had a chance to read the book yet but I have flipped through it to come up with my questions. I am excited to read it since I have not done any fulfillment stream projects or outside supplier work yet on my Lean journey.

1. At what point in the Lean journey do you recommend improving the fulfillment stream? Is this more advanced thinking or can be done in parallel in the beginning?

There are a few different approaches that can be taken.
a) You can improve the fulfillment stream in parallel with the other aspects of your Lean Journey. If you take this approach it is important to note that you may be making improvements in the fulfillment stream ahead of being able to fully leverage the improvements.
b) You can improve the fulfillment stream as it becomes a constraint on your Lean Journey. In other words you have a manufacturing strategy and your fulfillment stream is preventing you from taking the next step, you then transfer focus to those constraints.

2. How is the book relevant for service industries such as hospitals?

The section in the workbook regarding SKU classification and rationalization is particularly relevant for service industries. In hospitals SKU complexity is a problem as each practitioner has preferences regarding supplies, tools and equipment. This poses traditional fulfillment stream challenges regarding inventory levels, stocking locations and replenishment methods.

3. The book has a calculation for keeping both buffer stock and safety stock. How do you see these two as different and why have both?

It is important to calculate buffer stock and safety stock separately and to review your inventory levels frequently. Buffer stock protects you from common cause variation in demand. You should routinely have a need to use buffer stock as demand fluctuates. Safety stock protects you from special cause variation in demand. You should rarely have a need to use safety stock and when you do “dip” into safety stock it is critical that you understand the root cause of the variation.

WHY is one of the most important questions for your Lean journey. Here are the reasons:

IMPROVE ROOT CAUSES – Instead of fixing symptoms, determine what is causing the problem by asking WHY five times (Wikipedia example)

GOOD CHANGE MANAGEMENT – Ensure your staff knows WHY an improvement is made or the reasons for standardization. This is only helpful if the answer to WHY isn’t “because I told you so”.

SUSTAIN GAINS – Just because a brilliant process has been designed for standardization does not mean all staff will follow it. Leaders need to ask WHY an individual does not perform to standard. It could be because of lack of training, a misunderstanding of WHY change was made, a physical or space limitation preventing the ability to follow it, a flat out refusal to adhere to it, or many other reasons. You can not sustain unless you find out WHY people are not following it.

BETTER TEACHING – In my experience, teaching the reasons WHY behind the Lean tools helps people think critically. Just explaining how the tools are used can lead to a misuse of them.

IMPACT PERFORMANCE – Your organization probably has a lot of demand for projects. Find out WHY the projects are needed and use that information to select those that impact your performance. Projects can keep a lot of people flurrying in activity but are not always conceptualized to achieve improvement for the organization’s performance, creating value for customers, or achieving strategic aims.

While this picture is a piece of artwork it made me think what your organization can look like if you view Lean only as a set of tools. Losing the perspective of your system can easily lead to creation of complex and unusable solutions like this traffic light.

When I look at this traffic light tree, I picture one team adding one of the lights, then another team comes along and adds a light for their use, then a management team adds a third light to summarize what the other two teams lights represent, then more teams continue to add their light for their own use, and so forth. While a new light may be a solution for each group individually, the net result is a confusing and unusable tool for the system.

When you set out to improve things, think about the needs and impacts to the system. Take the time consider all options before acting. It is not true improvement if you optimize one area but the result is sub-optimizing another.